>> rally interrupted. the best monthly gains since 2011. the dollar near august high. one thing they are watching is the recovery. figures showing the economy remains buoyant. this is an -- decision day, the his biggest facing decision since taking over in 2013. i am angie lau.

coming here live from hong kong. we started with breaking news from south korea. ,ndustrial production rose 1.9% that is good news for south korea. you're on year, rose 2.4%. estimates were for lower. paris let'sl around see how that triggers sentiment today when trading gets underway in korea. let's talk about china. ending one of the most notorious example of state control over citizen's lives, the one child policy. beijing has decided it may have worked too well as the economy faces a shortage of workers and consumers. it is now a two child policy. david is here with the policy. >> certainly a big story. on paper. whether we do see the chinese

and prosper, we will see over the next 2-3 years. you will see how busy the hospital wards are. that did not happen the last time they relaxed it in 2013. angie: it was very notable. a lot of people said, a lot of families saying, we cannot afford our kids. david: they have to change the mindset. at that time, the number of couples who were allowed to have more than one kid to, roughly speaking, 11 million couples. only a 10th actually applied for permission. here is what is going to happen. everyone, all couples can now have two kids. they are casting a wider net. the problem that china faces, the leaders recognize this, the one child policy worked too well. they face an aging population early on in their economic

development cycle. thes typical anyway that birthrates fall as the country gets richer. let's put numbers to this. millions of people, the age basket -- bracket. numbers switche here. over half a trillion, have a oflion people over the age 60. over the next 20, 30, 40 years. they want to make up for it with new babies coming in. have a look at where they are. , everyone a richer thousand people. net change in the population. they are trying to get ahead of the problem. bad demographics is the problem.

everything in japan, kitchen sink and the baby. it is not a gene. underlying demographic problem. analyst saying and what has been the reaction? night,we did see it over the u.s., europe. a few here. someone said it is going to increase their business. dairy producers. almost a no-brainer. which industries will benefit. they came out with a tangible number of how much it would increase. 190 billion u.s. dollars. it is about changing the mindset. a lot of the couples were single

children themselves and there was nothing wrong with that. a lot of my trends and former classmates don't want to have more than one because it is expensive. you have to get an apartment, send the kids to the school. they have first world ambitions with a middle class income. it is an interesting topic. angie: what happens with the demographic shift we have been seeing all along? mostly male children, a whole host of issues that china looks like they are trying to fix now. thank you. biggest stock rally since 2011 has been punctured by the increasing possibility of a december rate rise. wall street had third-quarter gdp data to judge just. digest. let's start with su keenan. read ons the second day the fed decision. the gdp data, what we found was

it is a lot weaker than expected. data guides the fed. there is a big look at this. what we found again, the economyr gdp, did not expand as expected. a much slower pace. this happened as companies took advantage of gains in consumer and business spending to reduce bloated stop tiles, strategists -- stockpiles, strategists say. also an indication of some kind of break in the brisk rebound we have been seeing. is it has nothows hurt the fact that we have an october rally, still intact. are not too shabby. let's listen. >> risk appetite has returned.

the s&p is near an all-time high. we have had the ecb and the people's bank of china easing. i think it makes it easier for the fed. >> that is the latest and we had in the market. we are not that far off of the two-month highs for the s&p 500. angie: what did we see in wall street in terms of market reaction? su thethe second day read is december rate hike is back on the table. the fact that people are repositioning, given the fed commentary. doors are open for the rate hike. you are invested in some of the international businesses, that is going to mean a stronger dollar, something you want to reposition on. in terms of the market as a up 9% the october rally,

for the month. one of the best performances in four years. 12% if you count back to the august low. a big merger deal happened that believe the market. buoyed the market. pushing the stock up 6%. the stronger dollar also impacting commodities. oil coming back in a big way from its rally on wednesday. it was below the $46 mark after rising above it wednesday. the earnings free continues. starbucks, expedia, electronic arts among the companies that pushed out results. a lot of eyes on the friday jobs report out later friday. that is a key data point for the fed. it is going to be closely watched.

that: thank you for all of out of new york. let's see how the markets are trading this friday morning in this part of the world. australia, australian equities sell off your .1% lower. -- 0.1% lower. a stronger aussie dollar. in new zealand, let's head over there. , rbnz -- new th zealand equities selling off. korea, all about the boj. let's get over to japan. yesterday, the view from their ahead of the boj. and then after the decision to rates steady. dollar yen weakening.

99 ahead of the boj. anticipated to hold the most anticipated meeting. s divided on whether he will boost a record stimulus program, but they agree it is going to be a close call. us liveespondent joins from tokyo. what is the boj considering? reporter: good morning. for the bank of japan. what they need to decide is whether they are going to expand a record asset program. they are buying bonds, exchange traded funds. theyuestion is whether want to keep that going or get more creative. debt.by local government a lot on the table for them to

consider. the backdrop is they are dealing with a mixed bag of data. a mixed performance of the economy. though we had better numbers on industrial output yesterday, they are undecided on which way they are going to go. a little bit of psychology. governor kuroda likes to surprise. he likes to do what people least expect. some people suggest mind games mean he will stay on the sidelines. angie: it is the anniversary of the surprise last year, the halloween surprise which rocked the markets in terms of the reaction. kuroda probably wanted to prompt. it is also about currency. how important will the week yen be in the debate? enda: people talk about

currency wars. that is fine up to a point. in japan there is a view that perhaps the yen has gone far enough. it hurts importers. also household purchasing power. a good key component of the economy. there is political pressure among smaller and medium-sized into rises and they are letting the government know they are feeling the pinch. there is a sense that perhaps the weakness of the currency could be a bigger factor in the , a reason whys they hold off if they do. angie: life force in tokyo. thank you. rising after --

: shares raising and after hours trading. well above what the market was looking for. .28n dollar 28 average -- $1 average from analysts predictions. of ¥18.4 billion. or $3.892 billion. spending hasas risen for baidu. they are betting on new services which are really going to drive growth. we did see third-quarter net income falling. down 27%. $447 million.

$1.43 per share. well above what the market was looking for. we were talking about how baidu was trying to decrease cup edition and a buyout more companies. we heard them say there to her eir tuner service is going to give them a bigger slice of the domestic tourism market. before the numbers came through, we saw a little bit of mortality -- volatility. strongly in after-hours trading. the company has not had a great year on the nasdaq. we have seen stocks slumped 26%. on track for the worst annual decline since 2008. still, they are expecting

expenses to klein. the third quarter number beating expectations. angie: thank you so much for that. coming up next, the boj's turn to talk following on the heels of the fed announcement which the next guest has described as a pr move. find out why when "first up" returns." ♪

thee: checking some of stories making headlines around the world. 20 nations are involved read most attention will be on the u.s., russia, saudi arabia, and iran which is there at the invitation of washington. diplomats hope to bridge disagreements. the war has claimed more than 250,000 lives. and left more than 11 million people displaced. warships will continue to sale

by disputed islands in the south china sea despite protests from beijing. the ship sailed by prompting anger from china. admiral john richardson said the missions were routine and would continue. the u.s. does not recognize the as sovereignes territory. the s&p slipped from a two-month high to stall the rally. from our the views guest. join us live from san francisco. they decide to keep their powder dry. make every indication they are going to lift off in december. why did we see a sell off? being jitters of the marketplace. they continue to trade on every fed utterance. much as we think an ultimate

move or series of moves are priced in, this demonstrates maybe not to the degree we think they are. market volatility and interest rates, big move in the 10 year, are a subject or condition of that. saw moves in terms of protection of value. u.s. dollar strength. movements in commodities and gold. how do you think the jitters are going to affect of those markets of long-term? guest: commodities, gold, precious metals. real estate. the trended up after appearing pulled backreserve and did not raise rates. believe they created a lot of

uncertainty in the market at that time. if not then, when? those assets already up. yesterday's announcement threw cold water on that, indicating they may raise in december. a lot of those trading moves 24-30 sixe the last hours. you saw that in gold and silver, interest rates. the commodity markets. theyt does is demonstrate have introduced, by trying to be transparent and keeping everybody informed, they have spoken through so many different voices that they have created uncertainty. they have lost a little bit of it ability from what i can tell. beenrday's move may have an effort to try to restore some of that could ability and say, we are still thinking about this. we are still in line. we will see what happens. are in it foryou

the longer-term investor but many clients are calling you up, jittery. how are you sticking with your strategy? guest: we are long-term investors in a short-term, volatile environment. if you are trader, it has been fertile ground to make money. navigating it from a longer-term perspective is harder. it does create opportunities. the negative, rebalancing, you are getting pushed and pulled based on shorter-term motility. we are trying to educate investors on the longer-term strategy. of having a multi-asset approach to complement what you are doing. stocks and other risk assets. that is what we are trying to do. angie: what about the jobs report question mark is that going to be a biggie? of the interesting

things about the announcement yesterday, arguably since that time, economic data has come in a little weaker. gdp numbers at 1.5. a weak labor report earlier in the month. softness in housing. the economic data was stronger in september and august to raise rates than between now and december which presents another conundrum if you well on whether december is the right time. introduces a question rather increase themll in december or not. another thing is the diversions between the u.s. dollar and interest rates with respect to the rest of the world. you mentioned japan. that enters into it, too. gotcha. thank you. always good to talk to you. funny more to come on bloomberg television. you are watching "first up." ♪

angie: hard to believe but we are down to the last weekend at the rugby world cup. the 80,000 fans are in for a treat. the two best teams in the game, the defending champions and the winners of the 2016 rugby championship. new zealand and australia have won twice but never met in

the finals before. and play high intensity, tough rugby. we will ask some serious questions. the last 20 minutes. quite a close score. >> i think we can sneak it. we might as well make it saturday. you have to bring your best. angie: that is tomorrow. one other game to mention, the match nobody wants to play in. argentina and south africa meet at the limbic stadium in the third-place playoffs.

we have more breaking news as ernie news continues. third-quarter net income in singapore, coming in at 858 million singapore dollars. the estimate was a 12 million. 2 million. we will watch how that affects single or when markets open. coming up next, the latest inflation and job numbers from japan. news whening "first up" returns. ♪

angie: breaking news out of tokyo. we are watching on a slew of data coming out of the boj data. and thed spending inflation numbers for september. coming out to be the jobless rate. in line with estimates, 3.4%. the same number we got august. we are seeing the figure remaining stable for unemployment. let's take a look at national cpi. 0.1% down. that is slightly better than

what the economists were expecting. 0.2% down. staying in line with what we saw in august as well. fresh food as well as energy. a gauge of the boj, watching closely. in line with estimates, zero 9%. a little bit higher than what we saw in august. boj still anticipates the core cpi is going to increase in fall and winter months. number which is looking good for japan. may not take action unless we see falling oil prices and inflation. household spending for japan, that seems to be below estimates. economists expect anyone .1% -- expecting a 1.1% increase.

you may remember the surprise rebound in august. a significant pullback in the purse strings of japanese consumers. angie: thank you for that. more on the decision. atned by a japan economist hsbc. of a mixedittle bit bag of economic data for japanese policymakers. certainly better than expected inflation. the household spending, pursestrings tightening. how do you think doj is going to read this? meeting, terms of the they are going to focus on the positive from the cpi data. , which excludes food and energy, rising at 0.9%. viewis in line with their

trainingehold spending up. i think the boj recognizes trying to encourage spending is not just about achieving a target. they are concerned if wage growth does not catch up with the increase in prices, you are going to get further downward pressure. ason't think it is a simple the easing. angie: that has always been part of the plan of abenomics. increaseemployers to wages, otherwise how are you going to get spending on national levels? abe in a put tough spot? guest: the further deflationary stocks, if they come back, maybe the the oj will have a role to

play. in terms of correcting a strong boosting corporate profits, we are seeing record high profits. it comes down to delivery on the second and third arrows. some fiscal support would help accelerate the recovery. structural reforms. is something we have been talking about. when it comes to the policy thes, you are in the camp nothing is going to happen? it guest: noada. underlyingument is inflation trends are far from the 2% target, you could argue if they really want to meet that promise, they would have to deliver easing. that is too simple a way to look at it. domesticok at the

economy, notwithstanding the household spending, indicators are quite strong. we need more time for the tight filtermarkets to through. angie: industrial production was a surprise. guest: it wasn't just the positive september number but the fact that manufacturers remain optimistic. we will see a return in the fourth quarter which reduces recession risk. angie: always good to see you. thank you for breaking this down. a japan economist with hsbc. also watching big japanese tech stocks for us. tony, back in the black last quarter on strong demand for games, cameras, and image sensors. net income exceeds estimates at $278 million compared to a loss of $1 billion a year earlier.

sony has been swinging the acts and refocusing away from phone and tv sectors. the upward revision of our comes not only from a rise in ps for sales but from a growing demand for hardware and software. we have been able to reduce costs more than expected across all areas. beat estimates. they cited weaker yen and a shift to focus on high-value products. panasonic cap the full-year forecast and first half dividend unchanged. they will complete their withdrawal from the tv brand 0 by sellinged in 2 it10. to china, where interest rates

cuts are hitting big lenders. eckert is here with the results and what they say about the health of the sector. zeb: it reflects a slowdown in the chinese economy. all the banks, the big four time, having a difficult because with this interest rate cut, it is impacting yields to read the profitability on the loans. they are sitting aside more money for bad loans in case the loans they have issued go sour. there is the issue of less demand. fewer people looking for loans. this has had a significant impact on results. bank of china out yesterday with results, saying profits fell for the first time since the global financial crisis. of numbers report net income $6.4 billion. earlier. from a year similar story at china construction bank. second largest bank in china,

$9.3 billion. falling short of estimates. you have this deposit rate liberalization, impacting the funding cost, net interest margins. they are expected to narrow through next year. and interest rate cuts. it is having an impact on lowered yields for the bank loans that have been issued. this is having an across-the-board impact. angie: this is critical, with the largest bank in china expected to report. after the bill. and another bank if you are interested. the largest of china's banks. one of the biggest in the world measured by market value. similarkely to see issues. poor loan quality. rising bad loans.

less profitable loans korea the most erotic number we have seen is from bank of china. these banking stocks have gotten killed. stocks likely to be key movers in the hong kong session. we will be watching the financials. very closely. thank you for that. checking in on big baking stories. shareholders were left short on details. the co-ceo says deutsche bank will withdraw from countries as it tries to reduce a shares slump. in retail banking, we expect to reduce our product offerings by a third or so.

we are exiting 10 countries completely where we do not see prospects of successful development. have ao not believe we sufficiently robust environment. costs taking a toll at barclays. they cut profit outlooks for next year. due to a a $60 million misconduct charge. this hurt third-quarter results. net income missed estimates by 10%. confirmed a ceo to accelerate cost cuts and boost profits. standard charges may be looking to boost $4 billion. they are trying to boost their balance sheet. made withn has been whether a tw -- whether to

proceed with a share sale. shares in australia's bank in early trade look like this. close to 1% higher after announcing a 57% surge in first half profits, beating estimates. let's go over to paul allen in sydney. more good news for shareholders. what are the details? paul: an impressive result. $1.07 billion. up 57% for thed, same time last year. impressive. mainly driven by improved performance fees. the four-year dividend will be $1.60. honorable mention goes to the contribution of the australian dollar. a lot of the earnings are in foreign currency, typically u.s. dollars and euros. a week aussie has helped.

yearexpect the financial 2016 to be better still. has a track record for under promising and over delivering. this was an improvement on a figure already upgraded twice. you can look forward to more in 2016.e things look at the stock price up. that is about as lavish as praise gets from the market when it comes to australian financials. angie: thank you so much for that, paul allen. we continue to watch those shares. coming up, myanmar gearing up for the next month watershed elections. atcial report on what is stake for the country and business community. you are watching "first up." ♪

angie: breaking news. and south korea, buying chemical businesses for 3 trillion yuan. industryidentified officials. according to the report, we are otte chemical and others to hold board meeting. tte chemical to buy a stake of samsung chemicals. also buying half of samsung bp chemicals. and 90% of the sdi chemical business, according to korea economic daily report. we will see how that plays out when the markets open in south korea. let's get a quick check on how energy commodities are trading. west texas crude looks like this

right now. that,trading below $48.80. two dollars and $.24. all down. slumping oil prices, heavy impact on earnings. time now for a look at some of those reports from the bloomberg terminal. juliet is here. : they could face a tumble after the worst ever profit. about a fifth of what made in the same time last year. call ae facing what they complicated and grim environment. adrs fell 2%. shell also took a hit. posting the worst result in 16 years.

they are pressing ahead with their pursuit of a group which would be the largest ever. it would add to the cash flow and dividend payouts. prices handedil conical phillips the worst quarterly result in six years. they lost more than $1 billion in the last year. otherss mirrors those of oil majors. exxon mobil and chevron. shares have lost more than 22% so far this year. that was a look at the top corporate stories on the bloomberg terminal. angie: checking other stories making headlines, the philippines has won round one of the battle over disputed islands. an international arbitration panel says they can hear the

case. china says they do not have jurisdiction and refusing to take part. has defied local opinion and resumed work on a new u.s. airbase in okinawa. the land reclamation moved in as police moved in to block protesters. the long-running dispute has caused local outrage and damaged shinzo abe's popularity. residents want the base moved out altogether. describes the oppositions -- actions as dictatorial vivid four people were issued when a group attack to the opposition ahead of the 's holes.h several people have been arrested. wasleader aung san suu kyi

not there but is scheduled to hold a large rally there this weekend. as you can imagine, there is a lot at stake for myanmar's fledgling democracy. foreign money has flooded in. investors want stability and are watching very closely to see if this vote can deliver. it is tuesday night, and in a supporters have gathered to hear from their candidates. myanmar is taking a new path after decades of military rule. doors toened its foreign investment and tourism. growth has averaged 7% since 2010. overseas investment jumped tenfold between 2009 and 2014. the military backed ruling party is campaigning on that success.

for the country to develop, it needs stability and the end of economic sanctions. that is why i'm contesting. >> our program is change. like obama and his campaign. reporter: the and ld is expected to make significant gains. but won an election in 1990 was barred from taking power by the military. it is key to the strong level of support, the leader, aung san suu kyi. mother.ey call her and many believe if she wins come jobs and opportunities will follow. become better. we can buy mobile phones. before, the value of the land has increased.

reporter: despite this, aung san suu kyi is constitutionally barred from becoming president. >> if we win, she will be the leader. whether that name is applied. reporter: that provocative attitude risks a backlash from the military. there are questions over the vote itself your regularities emerging and uncertainty over how free and fair the poll will be. voters go november 8. angie: that was our reporter in myanmar. willng its forecast, one steelmaker's bleak outlook weigh on stocks in tokyo today? ♪

angie: welcome to the stocks exchange. we are looking at the open in japan and south korea. the reporters are here to tell us what they are keeping an eye on. juliette: i am looking at the electronic retailer. they had a good day. first half net profit, falling 98%. pick.my net profit has fallen 98%, to ¥18 million. the market was looking for ¥9.5 billion. they have kept the four-year target. a lot of research on the stocks. that 98% dropct

even though they have kept for your targets. you vonn: i did not read any comment. people think we bully him. it is a boring stock. up" so this "first is a first. , which wasctor responsible for what is called the leaning tower of yokohama. they found another one. they are conducting an investigation across all of their projects. 3000 in fact. yesterday, there was one. the government found. they found another one in your go the third one here. they plan on announcing the progress later today of the

investigation. vonne: i am leaning for a win. anja: they mentioned about china being the big concern. be they this is going to big risk to the steel industry. they have revised, net income down. , 32 percent.sts severe conditions overseas. the stock down 17% this year. positive, andy not just nippon steel. global steelmakers complaining about the chinese steel glut in the market. angie: we will see what happens. it is friday after all.

it is the end of the month. see how theyour to have done. next hour, a lot more coming up

♪ >> bon soir. mark: with all due respect to jeb bush, we would critique you, but our french workweek is just about over. >> oui, oui. ♪ john: the music is as funny as anything. mark: we just flew from colorado and boy, are our arms tired. tired, because we spent the